OPEC May Increase Production

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OPEC May Increase Production

06/14/2002

NEW YORK -- Outgoing OPEC Secretary-General Ali Rodriguez said the oil cartel could raise production before the group's September meeting.

Rodriguez, as well as OPEC ministers, has already said the group will hold supply curbs in place when the group meets on June 26 in Vienna. The cartel could wait until its scheduled Sept. 18 ministerial conference to raise production, the Associated Press reported.

OPEC cut supply by 1.5 million barrels per day (bpd) from the start of this year, triggering a rally that has increased oil prices by more than 25 percent. Fear that violence in the Middle East could disrupt the region's oil supplies fueled the gains.

Oil prices have fallen in recent weeks to the lower end of OPEC's $22-$28-per-barrel target range for its basket of cartel crudes, but analysts warn they will rise in the second half of the year unless OPEC lifts supply.

Fuel demand should pick up as global economic recovery strengthens, while U.S. gasoline consumption, which uses more than 10 percent of all world oil, is already running above last year's levels.

The U.S. government's Energy Information Administration has warned that oil prices could hit $30 later this year unless OPEC lifts production by up to 1 million bpd.